Banking on success

Financial giant’s new CEO is upbeat, though some protest lending policies

By Todd Wallack
Globe Staff / April 29, 2010

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CHARLOTTE, N.C. — Bank of America’s chief executive, Brian T. Moynihan, presided over his first annual shareholder meeting yesterday, giving an upbeat speech on the bank’s future and calmly fielding questions from impassioned investors and activists for more than two hours.

“We have the best franchise in financial services,’’ boasted Moynihan, a Wellesley resident who succeeded Kenneth D. Lewis as chief executive on Jan. 1, citing the company’s breadth of services and the quality of its employees.

Hundreds of investors, employees, and shareholder activists showed up at the meeting, held in an airy theater attached to Bank of America’s mammoth corporate headquarters in downtown Charlotte. Dozens of shareholders lined up in front of microphones in the aisles to question Moynihan about everything from his plans to help struggling homeowners to raising the company’s dividend to addressing climate change.

The bank’s decision more than a year ago to cut its quarterly dividend from 32 cents to 1 cent, in the face of mounting losses from the financial crisis and its controversial purchase of the troubled investment bank Merrill Lynch & Co., continues to irk some investors.

“The shareholders have suffered greatly and are still suffering,’’ said Thomas Lockhart, a retired lawyer in Charlotte who owns about $45,000 in Bank of America stock.

He asked Moynihan and the bank’s directors to consider raising the dividend to between 5 cents and 10 cents. He called Lewis a “rogue CEO,’’ but said after the meeting that he did not blame Moynihan. “He stepped into a terrible mess.’’

Moynihan said the bank would need to boost its capital reserves and have more quarters with strong earnings before it could increase its dividend.

Referring to Goldman Sachs Group, which is being sued by the government over its investments in the housing market, several shareholders asked Moynihan whether Bank of America had bet against the housing market or its own home loans.

Moynihan did not specifically answer about the housing bets, but said, “Everything we’ve looked at so far we’re comfortable with.’’

Others complained that the bank has not done enough to help borrowers keep their loans and questioned how much the bank has spent on lobbying, political contributions, and legal fees.

Moynihan patiently let most shareholders air their views without getting into fiery exchanges. Some had positive comments.

Bruce Marks, chief executive of the Neighborhood Assistance Corporation of America, an advocacy group based in Jamaica Plain, Mass., brought several homeowners to the meeting to praise the bank’s efforts to help borrowers adjust their loans and stay in their homes. Unlike some banks, Marks said, Bank of America is “stepping up and getting the job done.’’

A representative from the Center for Responsible Lending, a consumer advocacy group based in Durham, praised Bank of America’s decision to stop assessing overdraft fees to customers who accidentally make too many charges on their debit cards, causing their accounts to be overdrawn.

In the end, shareholders approved Bank of America’s full slate of directors and rejected all but one of seven shareholder proposals. The one that passed would give shareholders who control at least 10 percent of the bank’s shares the power to call a special meeting.

After the shareholder meeting, Bank of America’s board elected a new chairman, Charles “Chad’’ O. Holliday Jr., to replace former Morehouse College president Walter E. Massey, who is retiring. Holliday, 62, former chief executive of E.I. du Pont de Nemours and Co., was appointed to the Bank of America board in September. The move should please many shareholder advocates, who pushed the board to pick a new director who was untainted by controversy surrounding the Merrill Lynch deal.

“We believe that this represents an important break from the past,’’ said Jonathan Finger of Finger Interests Ltd., which owns stock in Bank of America and has been critical of the Merrill Lynch deal and the way the bank has been run.

“We expect that the newly constituted board will continue to focus on greater transparency and shareholder value, and will exercise discretion and caution when allocating shareholder capital,’’ he added.

About 50 protestors, mainly representing labor and social advocacy groups, gathered outside the meeting, holding signs complaining about predatory lending, the government bailout, and billions in bonuses awarded to executives at large banks.

“Our cause is a moral cause,’’ the Rev. Jesse Jackson told other protesters. “Usury is a sin.’’

Bank of America is the largest in Massachusetts, in terms of branches and deposits, and is one of the state’s largest employers, with 8,000 local workers.

Todd Wallack can be reached at